India Foregoes ₹14,000 Crore in Tax Revenue Due to Excise Duty Cuts on Fuel
Govt gives up Rs 14,000 crore in tax revenue after excise duty cut on petrol and diesel: Petroleum Ministry
The Economic Times
Image: The Economic Times
The Indian government has waived nearly ₹14,000 crore in tax revenue by reducing excise duties on petrol and diesel to mitigate rising fuel prices caused by the West Asia crisis. This move aims to support consumers while maintaining fuel supply stability amid ongoing challenges for oil marketing companies.
- 01The excise duty on petrol and diesel was cut by ₹10 per litre on March 27, 2023.
- 02Oil marketing companies (OMCs) are incurring losses of approximately ₹600 crore per day despite the duty cuts.
- 03Domestic LPG production has reached 50,000 tonnes per day to ensure fuel supply continuity.
- 04Some regions are experiencing panic buying due to agricultural and bulk demand, particularly in Gujarat, Maharashtra, and Uttar Pradesh.
- 057.99 lakh piped natural gas (PNG) connections have been established, with infrastructure ready for an additional 2.87 lakh connections.
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The Indian government has announced a significant reduction in excise duty on petrol and diesel, resulting in a loss of nearly ₹14,000 crore in tax revenue. This decision, made on March 27, 2023, was prompted by rising global crude oil prices due to the ongoing crisis in West Asia, which affects a substantial portion of India's fuel imports. Sujata Sharma, Joint Secretary in the Petroleum Ministry, stated that despite the excise cuts, oil marketing companies (OMCs) continue to face daily losses of around ₹600 crore. To address concerns over fuel shortages and panic buying in certain states, the government is closely monitoring supply levels and has replenished stocks at retail outlets. Additionally, domestic LPG production is being ramped up to 50,000 tonnes per day, and the expansion of piped natural gas connections is underway, with nearly 8 lakh connections already gasified. The government aims to ensure a stable supply of petroleum products amid these challenges.
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The excise duty cuts aim to alleviate the financial burden on consumers facing rising fuel prices, while ensuring a stable supply of petroleum products amid ongoing challenges.
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